-4-
The Corporation had discretionary authority and responsibility in
the administration of the Plan. Management of the Plan was
delegated to an administrative committee, which consisted of
petitioner and Mr. Cohen. Participants in the Plan included
petitioner, Mr. Cohen, Harold Breslow, and Robert Levine.
Petitioner and Mr. Cohen were fiduciaries with respect to
the Plan, within the meaning of section 4975(e)(3). At all times
relevant, the cotrustees of the Plan were petitioner and Mr.
Cohen. Both petitioner and Mr. Cohen were "disqualified persons"
with respect to the Plan, within the meaning of section
4975(e)(2).
Under the minimum funding standards of section 412, the
Corporation was required to contribute $186,200 to the Plan for
the plan year ending January 31, 1984.3 While the Corporation
claimed a $186,200 deduction on its corporate income tax return
for its taxable year ending January 31, 1985, as of January 31,
1988, the Corporation had not paid the 1984 mandatory
contribution. Instead, for the plan year ending January 31,
1985, the Corporation set up on the Plan's book two notes
receivable from "H. Bogart" in the amounts of $181,474 and
$4,756. These H. Bogart loans were fictitious. Later, in an
adjusting journal entry for the year ending January 31, 1988, the
3 For each of the Plan years which ended Jan. 31, 1984
through 1994, inclusive, there was an accumulated funding
deficiency of $184,571.
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Last modified: May 25, 2011